Tomorrow, former President Jimmy Carter will ceremonially hand over US control to Panama of that very system completed in 1914. (US Secretary of State Madeleine Albright backed out at the last minute.)

America's evolution over 100 years is encapsulated in the trajectory of the Panama Canal. In the first years of the 20th century, the United States flexed the muscles of a youthful, imperialist power. Now, the world's lone superpower acknowledges that partnerships, not unilateralism, will reign in the 21st century.

Both the canal's construction on foreign land virtually incorporated into the US and its turnover to the country where it sits are products of a US looking out for its strategic economic interests. The difference at the doorstep of the 21st century, analysts say, is that the US now sees those interests best served not by colonies but by democratic partners.

"Behind the [canal] treaties is the realization that we need Latin America for our economic well-being, but that we need [Latin countries] as democratic partners and not as a lesser developed part of the world to be exploited," says Ambler Moss, former ambassador to Panama and member of President Carter's treaties-negotiating team.

"That a strong country, the world's strongest, is voluntarily taking this step is recognition of the rights of the small country, and that is an important signal," says Juan Antonio Tack, who as Panama's foreign minister was a negotiator for the 1977 treaties. Although the treaties were finalized under Carter, Mr. Tack says a change in US thinking began under Henry Kissinger, President Nixon's secretary of state, "who saw the importance of settling the [canal] matter for the future of US-Latin American relations."

Given the symbolism of the turnover of the canal, many observers say it is unfortunate that President Clinton decided not to attend tomorrow's ceremony.

"The [canal] turnover symbolizes how global leadership in the 21st century requires partnerships, even with small countries, but without the president leading the delegation it is a lost opportunity to make that point," says Robert Pastor, who was coordinator of the treaty negotiations in the Carter White House.

Clinton repeatedly speaks in support of the canal treaties. But with US public opinion still ambivalent about the canal "giveaway," and with Vice President Al Gore facing a tough battle in the 2000 presidential race, observers say the president did not relish being so closely associated with the turnover.

In 1906, president Teddy Roosevelt, who had caused Panama to be carved out of Colombia so that the canal could be built without South American interference, traveled to the canal construction site. It was the first foreign trip by an American president, another symbol of America's blooming international role. (In the face of heated criticism of the trip, the Washington Star editorialized that it was probably a good idea for the president to see something of the world, and suggested that some day a president might even travel to Europe.)

At the end of the century, Clinton has become the country's most traveled president, having visited more than 60 countries. But his absence from Panama tomorrow undercuts his administration's emphasis on global partnerships, critics say. "Torn between doing the right thing and domestic political pressures, he opted for the latter, which is itself a symbol of the Clinton presidency," says David Scott Palmer, a Boston University Latin America specialist.

Curiously, though, Panamanians do not appear to be struck by the importance of the Dec. 31 turnover. Tack says two factors underlie this outward lack of enthusiasm: A majority of Panamanians still support some kind of US military presence here primarily for economic reasons, and Panamanian President Mireya Moscoso decided to mark the turnover with a ceremony Dec. 14, not Dec. 31.

"The ceremony should have been Dec. 31 at noon, when by the Torrijos-Carter treaties the canal is actually turned over, but this dilutes the significance," Tack says.

But for others it's the irony of Panama gaining full sovereignty over its territory. The canal just as the concept of national sovereignty is losing ground to globalization and international interdependence, which has Panamanians confused. "A century after our independence we are finally achieving our territorial integrality, but it happens to be when the world is seeing the nation-state in a different way," says Panamanian political analyst Miguel Antonio Bernal.

The best way to fulfill the promise of the canal treaties will be by Panamanians operating the canal in service to the world but also to the benefit of all Panamanians, Mr. Bernal says. That will mean developing a fuller democracy with participation and a keener sense of citizenship for Panamanians who have never been incorporated into their country's affairs - because of both a paternalistic US presence and undemocratic governments.

Developing that participatory society with a stake in the future "will be the best guarantee for the world about the canal," says Bernal.One cornerstone of that society will be a relationship with the US based on equality and cooperation, he adds.

"After 100 years of a love-hate relationship with the United States," says Bernal, "both countries have the opportunity to enter the next century working from a stabler footing and higher principles."